It remains to be seen whether he will live up to his pledge, but Scott Walker promises to be a very different kind of Republican, one who will truly be a fiscal conservative. That’s actually a rather radical stand for a Republican.
You could hear the old Republicans speaking in the voice of Rick Chandler, who last week floated the idea of adding an additional 2.5 percent sales tax in order to lower income and property taxes. The idea was quickly jumped on by conservative radio talker Charlie Sykes, who got a rapid-fire response from Walker aide John Hiller, who quashed Chandler’s trial balloon, promising Walker wouldn’t raise any taxes.
Chandler worked as revenue secretary under Republican Gov. Tommy Thompson, and the Thompson administration loved spending money. Thompson enjoyed a 12-year reign of ever-higher revenue because of an unindexed income tax. This created a phenomenon called “bracket creep”: As salaries went up with inflation, more and more taxpayers were pushed into the top income tax bracket. As a story in the current issue of Milwaukee Magazine notes, after 12 years of bracket creep, 80 percent of taxpayers were in the top bracket. The indexing of the income tax, which finally put an end to this in 1998, has saved taxpayers $1.8 billion over the last decade, the state’s Legislative Fiscal Bureau has estimated.
The old Eisenhower-era Republicans were fiscal conservatives. But the Ronald Reagan-styled Republicans were a different breed who believed it was fine to spend money and run up huge deficits. Since the early 1980s, there has been little or no difference in spending by Republicans and Democrats; the difference was how the money was raised: Republicans favored deficit spending and Democrats favored tax increases.
Nationally, Republican leaders have promised they’ve learned from their mistakes and will break the habit of deficit spending. They promised a ban on federal earmarks, but three days after that announcement, as the Associated Press has reported, Arizona Sen. Jon Kyl added an earmark to legislation in order to deliver a $200 million pot of funding to his state. Kyl is the second-ranking Republican senator.
The reality is that cutting spending will make some voters unhappy, so it’s difficult to do. Leaders with big agendas need money to carry it out, whether it’s Tommy Thompson with school spending increases or George W. Bush with the Iraq War. The Tea Party Republicans represented not just a revolt against Democrats, but a rejection of big-spending, deficit-raising Republicans.
Thompson favored high-speed rail; Walker opposes it. This is more radical than it might seem, as business leaders have typically favored any kind of transportation infrastructure improvements. Walker is distancing himself from centrist, business-oriented Republicans and allying himself with hard-core conservatives who can’t talk about rail without using the derogatory phrase “choo-choo train.”
Walker has promised he will run the state as he did Milwaukee County, where he consistently proposed budgets with no tax increases. But of course, those budgets were fattened each time by the liberal-leaning County Board, which routinely overrode Walker’s veto and restored funding for various county departments and functions. So the consequences of Walker’s cuts were always softened for the entire eight years he served as county executive.
Walker won’t enjoy that protection in Madison. He now has a legislature run by Republicans in both the Assembly and Senate, who also say they want to cut government spending. This means that every time Walker slashes the budget, it will be a real reduction in spending rather than a theoretical one. There will be consequences for voters if spending on public schools or state parks or universities get cut – and there will be lots of protests and unhappy reactions. Radical change does not occur easily.
Health Care Fat Cats
Back in 2004, the Milwaukee Journal Sentinel did a story revealing that then-Aurora Health Care CEO Ed Howe was earning in excess of $2 million in compensation annually. The figure seemed shocking. This was a tax exempt nonprofit, after all, meaning we taxpayers were in essence subsidizing this salary. That would include the poorest of the poor, whose landlords often pass on increases in property taxes in the form of rent hikes.
But Howe’s compensation is beginning to look like chump change. John D. Oliverio, the CEO of Wheaton Franciscan, another health care giant that owns hospitals in southeastern Wisconsin, gets a total compensation of $3.8 million, according to the organization’s most recent federal tax filing.
Now that kind of pay has moved down to lesser mortals. Donald Nestor, the chief operating officer of Aurora, received $8.2 million in compensation after his retirement, as a story in the Milwaukee Journal Sentinel reported.
“I’m not embarrassed by it…” Nestor told reporter Guy Boulton. “I feel I earned it.”
“I’ve never heard of anything like this before,” one health care executive told the newspaper.
Yep, it’s shocking, but it won’t be a few years from now, because the salaries and compensation will have risen even higher. If they can get away with it, the executives will continue to ratchet up their pay.
These health care organizations claim they are just operating like businesses, but they are quite unwilling to pay property taxes like other companies. Perhaps it’s time for the state legislature, which oversees all tax exemptions for nonprofits, to demand such consistency.
The Buzz
-For the 18 years Russ Feingold served as U.S. senator, Wisconsin claimed a unique distinction as the lone state with two Jewish male senators – the other, of course, being Herb Kohl. The only other state with two Jewish senators is California, with two women: Barbara Boxer and Dianne Feinstein. I believe this in the only time in American history that any state had two Jewish senators. For a state like Wisconsin, with such a small population of Jews, that’s remarkable. Perhaps more remarkable was how little notice it got. It’s simply not an issue anymore.
-In a past column, I noted that the so-called secret report by the Greater Milwaukee Committee wasn’t quite what the Journal Sentinel had originally claimed. Citing “confusion from recent media reports,” Greater Milwaukee Committee President Julia Taylor made it clear that there is no “new” and “secret” report in a letter she wrote to Milwaukee Common Council President Willie Hines Jr. Taylor explained that the GMC is simply working on a set of recommendations for the community based on a previous study by the Public Policy Forum. The GMC commissioned that study, and it was originally released back in January.
-As NewsBuzz reports, Wisconsin has a higher ratio of foreclosures-to-home sales than most states.
-And the Sports Nut has a message for Marquette: Play fair.
